WEBVTT - US Auto Safety Regulators Investigate Tesla Door Handles

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<v Speaker 2>Stacey, I want to turn to a story that you

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<v Speaker 2>highlighted earlier today, and that's about Tesla fating US auto

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<v Speaker 2>safety investigations over its door handles. This is a story

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<v Speaker 2>that Bloomberg had written about last week and it got

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<v Speaker 2>a lot of attention.

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<v Speaker 3>Yes, the story itself is pretty amazing. The reporters here

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<v Speaker 3>at Bloomberg did such an amazing job, and I have

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<v Speaker 3>to say, I mean the stories themselves were quite harrowing.

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<v Speaker 3>In some cases people not being able to get out

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<v Speaker 3>of their cars, people being trapped.

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<v Speaker 4>It was.

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<v Speaker 3>Yeah, I'm glad that it is being looked into.

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<v Speaker 2>All right, let's bring in Steve Man, Bloomberg Intelligence Global

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<v Speaker 2>Autos and Industrials Research analyst, and Steve, the fact that

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<v Speaker 2>people don't know how to get out of a Tesla

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<v Speaker 2>if it's locked in an emergency kind of situation on

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<v Speaker 2>impact or if there's a fire is not new. Yet

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<v Speaker 2>the National Highway Traffic Safety Administration did not act on

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<v Speaker 2>anything until now.

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<v Speaker 5>Why is that, Well, it is a very serious situations,

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<v Speaker 5>serious safety situation. Now, first of all, there is a

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<v Speaker 5>manual release from the interior of the vehicle. But the

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<v Speaker 5>safety issue is that you can't manually override the electronics

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<v Speaker 5>and open the door from the outside. Now, this is

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<v Speaker 5>an issue that's I'm plaguing the whole industry. It's not

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<v Speaker 5>just Tesla, okay, And you know there's there's a number

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<v Speaker 5>of automakers have solved the issue, and I think Tesla

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<v Speaker 5>does need to solve this issue because you know, you know,

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<v Speaker 5>people have have died because of this. Uh problem here.

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<v Speaker 3>I'm interested in. I was just looking. I was just

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<v Speaker 3>catching up with Tesla stock, and for some reason, shares

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<v Speaker 3>continue a very enthusiastic upward march in spite of these

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<v Speaker 3>really serious concerns. And like you say, you know the

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<v Speaker 3>concerns where a solution isn't necessarily Yeah.

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<v Speaker 5>I think I think from the investor's perspective, there is

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<v Speaker 5>a solution. There is a number of vehicles. For example,

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<v Speaker 5>the Aldi, they actually solved that issue, and they saw

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<v Speaker 5>they solved it by you know, having a double pull

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<v Speaker 5>on the lash to actually open the vehicle manually. So

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<v Speaker 5>I think from an investor perspective, it is an issue.

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<v Speaker 5>It needs to be solved, and it's solvable. The reason

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<v Speaker 5>why the stocks are going up, as you know, the

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<v Speaker 5>trillion dollar pay package and UH and the reiteration of

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<v Speaker 5>the company moving towards AI is really getting the investor

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<v Speaker 5>very excited. The robo taxi is rolling out apparently the

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<v Speaker 5>extended the model why is selling really well in China

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<v Speaker 5>so and then in Europe where we saw a lot

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<v Speaker 5>of decline line and EV sales seems to be ticking up.

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<v Speaker 2>But the pay package rewards Elon Musk for thinking really big,

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<v Speaker 2>not dealing with how to unlock car doors in the

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<v Speaker 2>event of some kind of problem. You say that Audi

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<v Speaker 2>has solved this. Are Tesla engineers going to take their

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<v Speaker 2>cueue from Audi?

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<v Speaker 5>Possibly? Really? Yeah? I mean it's it's it's important. It's

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<v Speaker 5>important that they solve this because Tesla, when they roll

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<v Speaker 5>out the robo taxi, safety is an important issue for them.

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<v Speaker 5>It's an important issue not just for Tesla, I think

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<v Speaker 5>for the whole industry, and it's a reputation that they're

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<v Speaker 5>trying to build. Especially you know they're as they try

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<v Speaker 5>to roll out robo taxi, and you know they want

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<v Speaker 5>to project themselves as a safe automaker. So I think

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<v Speaker 5>it's going to be a priority list for Elon Musk

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<v Speaker 5>and the rest of the organization there.

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<v Speaker 3>It does also seem that people are feeling quite optimistic

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<v Speaker 3>about this stock, but also there does seem to be

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<v Speaker 3>a liability issue in addition to a need to solve

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<v Speaker 3>this problem issue. Is that at all concerned? I mean

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<v Speaker 3>from the markets it would see no, but yeah.

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<v Speaker 5>It is. It is a liability and I wouldn't be

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<v Speaker 5>surprised that you know, there's going to be other legal

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<v Speaker 5>issue that comes up. But it's I think from an

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<v Speaker 5>investor perspective, this is normal business. Recalls are normal and

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<v Speaker 5>there are other safety issues that has been recall not

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<v Speaker 5>just at Tesla but and other automakers. So I think

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<v Speaker 5>the investor are taking this, I don't want to say lightly,

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<v Speaker 5>but it's normal business that you know, we're going to

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<v Speaker 5>get over this.

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<v Speaker 6>It's a work in progress.

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<v Speaker 2>Yes, are there other safety issues in particular that Tesla

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<v Speaker 2>needs to focus on pay attention to that could if

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<v Speaker 2>left unresolved, could become legal liability issues?

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<v Speaker 5>I yeah, I actually thought about this robotaxi right, and

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<v Speaker 5>I think there's still a safety driver sitting on the

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<v Speaker 5>passenger seat pretty much on every Robotaxi. I think there

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<v Speaker 5>is discussions of taking the safety driver out at the

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<v Speaker 5>end of the year, but I think they need to

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<v Speaker 5>tread very very carefully, especially for Tesla. It's a high

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<v Speaker 5>profile company. Anything negative is going to damage their reputation.

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<v Speaker 5>So if they don't take up the safety driver at

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<v Speaker 5>the end of the year, I wouldn't be surprised. I

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<v Speaker 5>think they do need to take it one step at

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<v Speaker 5>a time, make sure everything goes well before they do

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<v Speaker 5>a full launch without the safety driver.

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<v Speaker 2>All right, Steve Man giving us something to look ahead

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<v Speaker 2>to when it comes to Tesla. He is our Global

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<v Speaker 2>Autos and Industrials research channalyist at Bloomberg Intelligence. Stay with

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<v Speaker 2>us more from Bloomberg Intelligence coming up after this.

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<v Speaker 1>You're listening to the Bloomberg Intellligion's podcast. Catch us live

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<v Speaker 1>weekdays at ten am Eastern on Apple, Cocklay and Android

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<v Speaker 1>Auto with the Bloomberg Business App. Listen on demand wherever

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<v Speaker 1>you get your podcasts, or watch us live on YouTube.

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<v Speaker 2>Let's talk a little bit about AI tech related companies.

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<v Speaker 2>And I know that's so general and vague, but that's

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<v Speaker 2>how I feel like you kind of encompass all of them.

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<v Speaker 2>Core Weave says it's shareholder, in Vidia, has agreed to

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<v Speaker 2>buy cloud services valued at six point three billion dollars,

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<v Speaker 2>which sounds like a lot of money, but I think

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<v Speaker 2>in this space may not be.

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<v Speaker 6>Let's bring in on rog run up for us.

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<v Speaker 2>He is Bloomberg Intelligence technology analysts to talk a little

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<v Speaker 2>bit about this AI infrastructure demand and arag why is

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<v Speaker 2>this cloud contract within Vidia important.

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<v Speaker 7>So the reason why it's important is because Conviave is

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<v Speaker 7>considered a neo cloud or a cloud without you know,

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<v Speaker 7>you could say a backing like you know what we

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<v Speaker 7>have from Amazon's other businesses or.

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<v Speaker 4>Microsoft other businesses. So the two risk people think about

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<v Speaker 4>cold Weave is what if tomorrow the demand for AI

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<v Speaker 4>cloud infrastructure drops or pricing drops. This deal basically says

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<v Speaker 4>for the next several years, if there is any unused

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<v Speaker 4>cloud capacity for core viv, Nvidia will come out and

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<v Speaker 4>take that. So I think this is, you know, another

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<v Speaker 4>way of telling the investors that you know, please don't

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<v Speaker 4>worry about the demand for AI infrastructure. You know, the

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<v Speaker 4>parent of it all, which is Nvidia, who's selling the

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<v Speaker 4>chips to gore Viv, will take care of the demand

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<v Speaker 4>if there are any issues.

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<v Speaker 3>Do you think that the amount of cloud space that

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<v Speaker 3>AI will require will be smaller than we think it is.

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<v Speaker 3>I mean, certainly that shook the markets a couple of

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<v Speaker 3>months ago.

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<v Speaker 4>Yeah.

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<v Speaker 7>Well, at this point there is more demand than capacity,

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<v Speaker 7>which is why there is a big rush to create

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<v Speaker 7>new data centers, you know, install those new chips, create

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<v Speaker 7>new networks, and go out and start to build applications

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<v Speaker 7>that are AI enabled.

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<v Speaker 4>Now, having said that.

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<v Speaker 7>You know, people have seen this movie quite a bit

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<v Speaker 7>back in the two thousand era when there was a

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<v Speaker 7>glut of infrastructure built for Internet, but then suddenly in

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<v Speaker 7>the next two to three years there was a drop

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<v Speaker 7>in demand for that time.

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<v Speaker 4>And this is what a lot of investors are fearing.

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<v Speaker 7>And that's I think the big overhang on the space

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<v Speaker 7>that at this point everybody is happy. Twenty twenty five

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<v Speaker 7>is great, twenty six is great, but what happens after

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<v Speaker 7>that is the big question mark.

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<v Speaker 2>Yeah, well, everyone has to get anxious about something, so

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<v Speaker 2>we might as well look out to twenty twenty seven.

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<v Speaker 2>At this point, anark, let's talk about another company you mentioned, neocloud.

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<v Speaker 2>Nebus plans to raise three billion dollars in convertible notes

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<v Speaker 2>and equity to help it expand this follows a major

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<v Speaker 2>deal to provide AI infrastructure to Microsoft.

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<v Speaker 6>Is Nebuus also a neocloud company?

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<v Speaker 4>Yes, absolutely, it's the same kind of company.

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<v Speaker 7>They are being funded by private credit, by investors, private investors,

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<v Speaker 7>and they are creating a similar kind of a cloud infrastructure.

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<v Speaker 7>And you know what's happening with Microsoft is there are

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<v Speaker 7>two things that are important for people to understand. One

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<v Speaker 7>they do they run chack GPT instances, which is when

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<v Speaker 7>you know, when I'm tweeting or I'm looking at anything

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<v Speaker 7>on open ai Chat GPT, those workloads are running on

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<v Speaker 7>Microsoft's cloud infrastructure.

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<v Speaker 4>It has it is a lack of capacity, so it's

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<v Speaker 4>going out.

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<v Speaker 7>To neoclouds like core Vi and now naby Is to say,

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<v Speaker 7>you know, I will buy that capacity for you as

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<v Speaker 7>long as I can need it. So that's it's Microsoft Capex,

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<v Speaker 7>but it's underleasing. Second aspect is Microsoft is basically saying

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<v Speaker 7>I don't want to build a lot more capacity for

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<v Speaker 7>training off my models. I'm going to outsource that. So

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<v Speaker 7>which is why it's good for those neon clouds. If

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<v Speaker 7>Microsoft is going to spend that money, it's going to

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<v Speaker 7>do rental from these cloud providers rather than building some

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<v Speaker 7>of it in house.

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<v Speaker 3>Jumping now to Oracle, they're having a very good morning,

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<v Speaker 3>and a lot of that has to do with the president,

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<v Speaker 3>President Trump announcing this morning or hinting anyway that Oracle

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<v Speaker 3>might be involved in a TikTok deal. Can you talk

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<v Speaker 3>a little bit about that.

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<v Speaker 7>Yeah, I was to be very frank, I was a

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<v Speaker 7>bit surprised about the stock reaction because I think it

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<v Speaker 7>was very clear back in January that TikTok would be

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<v Speaker 7>running in the US and Oracle will be the cloud

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<v Speaker 7>provider on the back end. So when you know, similar

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<v Speaker 7>to what I just mentioned on Microsoft Cloud, if somebody

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<v Speaker 7>goes on TikTok and is running that application, Oracle runs

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<v Speaker 7>that the back end of it or the Oracle Cloud infrastructure,

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<v Speaker 7>and you know that revenue was was argued up for

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<v Speaker 7>you know, loss under the previous administration when if TikTok

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<v Speaker 7>was to be closed. But it seems, you know, back

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<v Speaker 7>from January onwards, that the President keeps on extending the

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<v Speaker 7>ban on it, and you know, we we you know,

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<v Speaker 7>Oracle still making the money of it. The big question is,

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<v Speaker 7>if there is a buyout that's led by US companies,

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<v Speaker 7>will Oracle have any equity stake in it? And you know,

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<v Speaker 7>we think it doesn't need to because it's already looking

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<v Speaker 7>for so much of expansion capacity for its cloud infrastructure

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<v Speaker 7>because of the open the ideal, So we don't think

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<v Speaker 7>that's the case.

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<v Speaker 4>But practice speaking, nothing surprises us anymore.

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<v Speaker 2>That's a good way to end it on ourragrana Bloomberg

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<v Speaker 2>Intelligence technology analysts. Nothing surprises us anymore on the AI

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<v Speaker 2>infrastructure demand, which seems never ending, at least for now.

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<v Speaker 6>Stay with us. More from Bloomberg Intelligence coming up after this.

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<v Speaker 1>You're listening to the Bloomberg Intelligence Podcast. Catch us live

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<v Speaker 1>weekdays at ten am easterne on Apple, Cocklay and Android

0:11:29.360 --> 0:11:32.640
<v Speaker 1>Auto with the Bloomberg Business App. Listen on demand wherever

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<v Speaker 1>you get your podcasts, or watch us live on YouTube.

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<v Speaker 6>All right, let's bring in Jeff Brown.

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<v Speaker 2>Now he is founder in CEO T two Capital Management,

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<v Speaker 2>and Jeff is here to talk to us about commercial

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<v Speaker 2>real estate. Jeff, this bad rate cut that's gonna happen tomorrow.

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<v Speaker 2>It's pretty much baked in and the big question is

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<v Speaker 2>what happens after tomorrow. Do we get a series of

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<v Speaker 2>rate cuts, do we continue cutting rates into twenty twenty six,

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<v Speaker 2>and do we see a string of rate cuts in

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<v Speaker 2>twenty twenty six. How's the commercial real state market position

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<v Speaker 2>right now?

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<v Speaker 8>Yeah, I think the commercial real estate market is ready

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<v Speaker 8>to breathe a big sigh of relief. It does seem

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<v Speaker 8>like a foregone conclusion that twenty five basis points is

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<v Speaker 8>on the table for tomorrow. Expectations for I think last

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<v Speaker 8>I saw we talked earlier this week, and turning, I

0:12:15.160 --> 0:12:17.679
<v Speaker 8>think it's two additional twenty five basis point cuts going

0:12:17.720 --> 0:12:19.960
<v Speaker 8>into the end of the year. And so, yeah, real

0:12:20.040 --> 0:12:23.520
<v Speaker 8>estate's looking for a reprief We've endured these rate these

0:12:23.640 --> 0:12:27.240
<v Speaker 8>increased rate shocks from twenty twenty two and twenty twenty three.

0:12:27.920 --> 0:12:29.760
<v Speaker 8>A lot of people have been kind of clinging, holding

0:12:29.760 --> 0:12:32.960
<v Speaker 8>on for dear life since then. And so yeah, again,

0:12:33.320 --> 0:12:35.800
<v Speaker 8>interest rates moving down is a big sigh of relief.

0:12:36.040 --> 0:12:37.959
<v Speaker 3>I mean, they're not moving down that much. Twenty five

0:12:38.000 --> 0:12:40.520
<v Speaker 3>basis points is a pretty little step down. Does that

0:12:40.600 --> 0:12:43.320
<v Speaker 3>actually make a difference or is it more psychological?

0:12:43.600 --> 0:12:46.480
<v Speaker 8>There's definitely a psychological element to it. I always say

0:12:46.480 --> 0:12:49.160
<v Speaker 8>real estate developers are about the most optimistic people that

0:12:49.200 --> 0:12:52.160
<v Speaker 8>you'll meet, So any kind of light at the end

0:12:52.160 --> 0:12:55.400
<v Speaker 8>of the tunnel is grounds for optimism. There's at least

0:12:55.440 --> 0:12:57.160
<v Speaker 8>some clarity now. I think a lot of people went

0:12:57.200 --> 0:12:58.839
<v Speaker 8>through a period of time a couple of years ago

0:12:58.880 --> 0:13:01.120
<v Speaker 8>where you just didn't know what's going to happen next,

0:13:01.120 --> 0:13:02.640
<v Speaker 8>you know what she is going to fall. Then there's

0:13:02.960 --> 0:13:05.480
<v Speaker 8>great optimism with the current administration in the White House,

0:13:05.520 --> 0:13:08.320
<v Speaker 8>and we talked about President Trump and his background in

0:13:08.360 --> 0:13:11.360
<v Speaker 8>real estate, and so expectations that real estate would, you know,

0:13:11.480 --> 0:13:15.040
<v Speaker 8>open up a little bit, transaction volume pick up. It

0:13:15.120 --> 0:13:19.240
<v Speaker 8>hasn't manifested quite yet. We've had tariffs, you know, we've

0:13:19.240 --> 0:13:22.640
<v Speaker 8>had registrates just kind of stagnate. Office seems to be

0:13:22.679 --> 0:13:24.640
<v Speaker 8>getting back on its feet at this point. So again,

0:13:24.679 --> 0:13:27.600
<v Speaker 8>it's just a it's not a big shock in the

0:13:27.640 --> 0:13:30.720
<v Speaker 8>positive direction, but there is glimmers of hope and optimism now.

0:13:30.920 --> 0:13:33.439
<v Speaker 2>Even with the rate cuts last year, bar and costs

0:13:33.440 --> 0:13:36.760
<v Speaker 2>remained fairly elevated compared to where they were before the pandemic,

0:13:37.600 --> 0:13:40.760
<v Speaker 2>and as Stacey points out, a twenty five basis point

0:13:40.760 --> 0:13:42.480
<v Speaker 2>cut today is not going to make tomorrow I should

0:13:42.480 --> 0:13:44.520
<v Speaker 2>say it's not going to make too much of a difference.

0:13:45.000 --> 0:13:48.560
<v Speaker 2>You have some major intractable issues that are still holding

0:13:48.640 --> 0:13:52.840
<v Speaker 2>up your industry, including costs, whether it's the cost of

0:13:52.880 --> 0:13:55.800
<v Speaker 2>material or the cost of labor. Tell us a little bit,

0:13:55.920 --> 0:13:58.240
<v Speaker 2>how about how much costs have risen over the last

0:13:58.280 --> 0:13:58.880
<v Speaker 2>couple of years.

0:13:59.360 --> 0:14:02.280
<v Speaker 8>Yeah, that has been a source spot in real estate. Frankly,

0:14:02.400 --> 0:14:05.439
<v Speaker 8>is when COVID hit. So we're going back five years

0:14:05.480 --> 0:14:10.600
<v Speaker 8>now and we had this exacerbated increase and construction costs

0:14:10.600 --> 0:14:13.120
<v Speaker 8>and construction labor, and all of a sudden, you know,

0:14:13.160 --> 0:14:17.280
<v Speaker 8>it's supply supply issues and delivery issues. And again I

0:14:17.320 --> 0:14:19.960
<v Speaker 8>think we finally got through that. However, what has not

0:14:20.520 --> 0:14:23.200
<v Speaker 8>really relented is the construction costs. And now as we're

0:14:23.200 --> 0:14:26.200
<v Speaker 8>looking at you know, there is a supply shortage that's

0:14:26.240 --> 0:14:29.080
<v Speaker 8>that's upon us. There is just a dearth of construction

0:14:29.240 --> 0:14:32.760
<v Speaker 8>that's out there at this point. So it favors existing landlords,

0:14:32.760 --> 0:14:34.640
<v Speaker 8>people you know, like T two that own a fair

0:14:34.680 --> 0:14:37.240
<v Speaker 8>amount of multi family properties around the country, student housing

0:14:37.240 --> 0:14:40.400
<v Speaker 8>properties around the country. Because so few are being built

0:14:40.400 --> 0:14:43.560
<v Speaker 8>at this point, developers can't make numbers pencil to make

0:14:43.560 --> 0:14:46.880
<v Speaker 8>a you know, a profitable construction development at this point.

0:14:47.160 --> 0:14:50.440
<v Speaker 3>What is hampering I guess new development is it? Is

0:14:50.440 --> 0:14:53.600
<v Speaker 3>it labor? Is it materials? Costs? I know lumber has

0:14:53.640 --> 0:14:56.000
<v Speaker 3>been a big kind of topic that that's come up

0:14:56.120 --> 0:14:57.000
<v Speaker 3>quite a bit recently.

0:14:57.200 --> 0:14:59.760
<v Speaker 8>Yep, and lumbers even retreated quite a bit. So that's

0:14:59.800 --> 0:15:01.880
<v Speaker 8>that's spend again a bit of a sigh of relief.

0:15:02.240 --> 0:15:03.880
<v Speaker 8>There is a lot of volatility there, so who knows

0:15:03.880 --> 0:15:06.880
<v Speaker 8>when that jumps back up. But yeah, I would say

0:15:07.040 --> 0:15:09.480
<v Speaker 8>the costs in you know, just labor and materials has

0:15:09.480 --> 0:15:13.280
<v Speaker 8>been the driving factor toward constraining construction activity.

0:15:13.880 --> 0:15:16.720
<v Speaker 2>When you and your fellow Titans of commercial real estate

0:15:16.800 --> 0:15:20.320
<v Speaker 2>gather and talk, what do you find yourself lamenting the most?

0:15:22.120 --> 0:15:24.640
<v Speaker 8>I wish I were in conversations with Titans for starters

0:15:27.080 --> 0:15:29.119
<v Speaker 8>as far as lamenting goes.

0:15:30.040 --> 0:15:32.040
<v Speaker 6>What are you celebrating then? If not lamenting?

0:15:32.680 --> 0:15:36.240
<v Speaker 8>You know, honestly, there's a lot of celebrating for clarity.

0:15:36.960 --> 0:15:39.240
<v Speaker 8>I always say I'm you know when I'm when I'm

0:15:39.240 --> 0:15:41.280
<v Speaker 8>a round table at a round table with other real

0:15:41.320 --> 0:15:45.360
<v Speaker 8>estate investors, private equity fund managers, Like all we ask

0:15:45.480 --> 0:15:49.720
<v Speaker 8>for is clarity, Like define the boundaries, give us some clarity,

0:15:50.080 --> 0:15:52.960
<v Speaker 8>and then we can operate, we can play the game. Uh,

0:15:53.080 --> 0:15:55.160
<v Speaker 8>for the you know, past three or four years again,

0:15:55.240 --> 0:15:59.720
<v Speaker 8>interest rates spikes, construction materials just you know, running up

0:15:59.720 --> 0:16:03.960
<v Speaker 8>on a tariffs implement to implemented. It's just been really

0:16:03.960 --> 0:16:07.760
<v Speaker 8>really hard to just have a level playing field, have

0:16:07.920 --> 0:16:10.840
<v Speaker 8>some visibility even six months down the road. And so

0:16:10.960 --> 0:16:13.960
<v Speaker 8>what we celebrate is the appearance of some clarity at

0:16:13.960 --> 0:16:17.840
<v Speaker 8>this point, and so it does kind of unlock some confidence,

0:16:17.920 --> 0:16:20.760
<v Speaker 8>unlocks some capital. It's been really really hard just to

0:16:20.800 --> 0:16:23.480
<v Speaker 8>capitalize project in light of the uncertainty. How do you

0:16:23.560 --> 0:16:26.240
<v Speaker 8>underwrite a project that's that you're intending to exit in

0:16:26.280 --> 0:16:28.960
<v Speaker 8>five or seven, let alone ten years, just really really

0:16:29.000 --> 0:16:31.400
<v Speaker 8>challenging in light of the lack of clarity that's been

0:16:31.400 --> 0:16:33.640
<v Speaker 8>out there. So what we celebrate is clarity, and what

0:16:33.680 --> 0:16:37.000
<v Speaker 8>we lament, I would say, is just frankly, the lack

0:16:37.040 --> 0:16:37.560
<v Speaker 8>of clarity.

0:16:38.280 --> 0:16:41.000
<v Speaker 3>Is that lack of clarity? I mean, is there clarity

0:16:41.120 --> 0:16:42.720
<v Speaker 3>right now? It seems like there's quite a bit of

0:16:43.120 --> 0:16:45.760
<v Speaker 3>lack of clarity that can come into my mind, especially

0:16:46.320 --> 0:16:48.960
<v Speaker 3>for companies that are contemplating opening up a factory or

0:16:49.000 --> 0:16:51.160
<v Speaker 3>something in order to counteract tariffs. I feel like the

0:16:51.200 --> 0:16:53.600
<v Speaker 3>uncertainty around the tariffs is preventing quite a bit of that.

0:16:54.080 --> 0:16:57.240
<v Speaker 3>But is there clarity that I'm unaware of or what

0:16:57.360 --> 0:16:58.960
<v Speaker 3>is this clarity that's getting celebrated.

0:16:59.040 --> 0:17:01.880
<v Speaker 8>It's a great point. See, Yeah, I think I don't

0:17:01.880 --> 0:17:03.920
<v Speaker 8>know that there's crystal clarity at this point, but there

0:17:03.960 --> 0:17:06.679
<v Speaker 8>is there's at least the expectation of a lack of

0:17:06.840 --> 0:17:10.720
<v Speaker 8>a lot of volatility. Tariffs at least they've been digested,

0:17:11.800 --> 0:17:15.399
<v Speaker 8>We've whether that storm at least temporarily. It doesn't seem like,

0:17:15.880 --> 0:17:18.480
<v Speaker 8>you know, new terrorists are going to come to bear

0:17:18.560 --> 0:17:22.280
<v Speaker 8>at this point. We all understand that interest rates kind

0:17:22.280 --> 0:17:24.680
<v Speaker 8>of are where they are, if anywhere, they're going down.

0:17:25.560 --> 0:17:28.680
<v Speaker 8>And then we understand the fact that construction costs are elevated.

0:17:28.760 --> 0:17:32.600
<v Speaker 8>And so again it's not it's not like celebratory worthy,

0:17:33.040 --> 0:17:36.320
<v Speaker 8>but I would say at least there is some clarity

0:17:36.400 --> 0:17:40.600
<v Speaker 8>even surrender to the facts, and we have reality, We

0:17:40.680 --> 0:17:43.400
<v Speaker 8>have the playing field now we can operate, whether that's

0:17:43.480 --> 0:17:45.960
<v Speaker 8>being very active or kind of retreated and being back

0:17:46.000 --> 0:17:46.560
<v Speaker 8>on the sidelines.

0:17:46.640 --> 0:17:48.920
<v Speaker 6>So it's kind of an acceptance of the current conditions.

0:17:49.000 --> 0:17:50.359
<v Speaker 8>That's a fair, fair statement.

0:17:50.440 --> 0:17:52.760
<v Speaker 2>Yeah, Well, the acceptance of the current conditions is there's

0:17:52.840 --> 0:17:54.800
<v Speaker 2>a lot of talk, a lot of happy talk about

0:17:54.880 --> 0:17:58.240
<v Speaker 2>data centers, and I'm wondering how much of that talk

0:17:58.359 --> 0:18:00.800
<v Speaker 2>is being translated into action.

0:18:01.760 --> 0:18:04.840
<v Speaker 8>Yeah, it does seem like there is action, and it

0:18:04.920 --> 0:18:06.919
<v Speaker 8>is a kind of a new frontier. It is the

0:18:06.920 --> 0:18:09.000
<v Speaker 8>gold rush and commercial real estate right now to get

0:18:09.000 --> 0:18:12.080
<v Speaker 8>into the data center space. I think the news last

0:18:12.119 --> 0:18:14.760
<v Speaker 8>week we're open AI and Oracle are partnering together on

0:18:14.800 --> 0:18:17.800
<v Speaker 8>a if I understood correctly, a three hundred billion dollar project.

0:18:17.880 --> 0:18:20.880
<v Speaker 8>That's that's real money and backed by you know, real

0:18:20.920 --> 0:18:23.680
<v Speaker 8>company and Oracle. We talked a little bit about you know,

0:18:23.720 --> 0:18:26.120
<v Speaker 8>Blackstone here in New York is very active and very

0:18:26.160 --> 0:18:28.359
<v Speaker 8>vocally active at least in the in the data center space.

0:18:28.400 --> 0:18:31.439
<v Speaker 8>That's real, real capital behind those efforts. So I think

0:18:31.840 --> 0:18:34.639
<v Speaker 8>it has some traction, But you know, how it unfolds

0:18:34.680 --> 0:18:37.600
<v Speaker 8>and and what data centers look like in two three years.

0:18:37.640 --> 0:18:40.840
<v Speaker 8>And I mean, frankly, this this AI revolution and the

0:18:40.880 --> 0:18:45.080
<v Speaker 8>speed at which adoption is necessary is something I don't

0:18:45.119 --> 0:18:46.840
<v Speaker 8>know if I've ever seen in the commercial real estate

0:18:46.920 --> 0:18:50.119
<v Speaker 8>space anyway. But it's here, it's got some real capital

0:18:50.119 --> 0:18:52.000
<v Speaker 8>behind it, and I think, you know, we'll see how

0:18:52.000 --> 0:18:53.400
<v Speaker 8>it plays out over the next few years.

0:18:54.000 --> 0:18:56.080
<v Speaker 2>All Right, good talking with you, Jeff, Thanks for us

0:18:56.119 --> 0:18:58.560
<v Speaker 2>winging by. Come back again, maybe after a series of

0:18:58.600 --> 0:19:00.359
<v Speaker 2>rate cuts, and we can talk a little bit about

0:19:00.359 --> 0:19:04.600
<v Speaker 2>the increase in clarity that you and your peers are seeing.

0:19:04.880 --> 0:19:08.360
<v Speaker 2>Jeff Brown is founder and CEO of Chitu Capital Management.

0:19:08.400 --> 0:19:10.920
<v Speaker 2>They are investors in commercial real estate. They're also a

0:19:10.960 --> 0:19:12.000
<v Speaker 2>private equity firm.

0:19:12.680 --> 0:19:17.399
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